5 Pitfalls to Avoid When Getting Started In Real Estate

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Residential real estate is a career field that is exciting, dynamic, and incredibly rewarding — with nearly unlimited earning potential and endless opportunities for learning and growth.

It is also a career path that exemplifies the old adage, “you get out of it what you put into it.” Many of the decisions you make early in your career can have an enormous impact on your future — either setting you up to create the sustainable, lucrative, and flexible business you’ve dreamed about, or limiting your capacity to grow and earn over time. 

Want to put yourself in the best position possible for success? Let’s explore five pitfalls or missteps to avoid when getting started in real estate: 

1.) Focusing on Split More Than Training

“What is your split?” This is one question that our management team gets asked a lot when interviewing new agents. When entering this field, it is important to understand what your commission is and what each brokerage is offering. But while this is always worth discussing, we do feel that it shouldn’t be your number one priority when entering the industry and finding a brokerage. 

Baird & Warner offers very competitive commissions, compared to what other brokerages out there offer — but that’s not where we place our main focus. Instead, we believe that it’s more important to focus on impactful support, training, and business planning that empower our agents to develop more sustainable long-term businesses — and which ultimately puts more in their pockets over time. 

As a real estate broker, the amount you take home is a direct reflection of the time, energy and effort you put into your career. Some brokerages may offer you a 100 percent split. But if you don’t get the training, tools, and support needed to build and sustain your business in the first place… Well, let’s just say that 100 percent of zero dollars is zero dollars. What good does that do you?

Some brokerages offer a higher commission split to new agents because they don’t have anything else of value to negotiate with. Here, we know that building a solid foundation is key. That’s why Baird & Warner places so much emphasis on training, with a three-tiered approach at the corporate, office, and individual levels. At a brokerage like Baird & Warner, it’s not just about one transaction, but setting you up with the skills it takes to grow and scale a business that can support you for many years to come. 

And when you’re just starting out, keep in mind that commission and splits are something that can grow over time. As you get established and produce more, Managing Brokers are often happy to review your compensation so that you can continue to grow alongside your business. But if you don’t have the coaching, support, and tools, it will be a lot harder to set yourself up for success with your clients and as a business owner. 

Part of our training is about teaching new agents how to run a business and generate leads, which is your main responsibility when you do have a business. Which brings us to… 

2.) Getting Distracted

There are so many things that are clawing at you and trying to pull your attention when you’re a brand-new-to-the-business broker. You’ve got Zillow calling you to ask for you to pay for leads. You’ve got Mariano’s calling you asking you to advertise your face on shopping carts. You’re getting immersed in the news and reading articles each day about what’s happening in local and national real estate.

While there are many things going on as you start your new real estate business, it’s important not to lose sight of your long-term goals. 

Some agents get caught up on designing the perfect brand logo, or creating a viral Instagram post. And they’re so focused on all these small things that they forget to invest in the big things — that is, the activities that are actually going to get them business at the end of the day. 

Early on in your career, one of the most important things you can do to set yourself up for long-term success is to create a business plan with your managers and stick with it. This plan is designed to keep you on track, and put you in the position to keep your business moving forward. 

At the same time, staying focused is easier when you have managers you can count on. Here in the Lincoln Park office, our agents can rely on a management team that is always here to provide support and guidance catered to their individual goals and plans. Even after hours, you can reach out to us to help you through those pivotal points in your business as you’re getting started. 

3.) Not Sticking to Your Schedule

In addition to taking the long view and sticking to your business plan, it’s also important to set up a daily schedule. We’ve offered some thoughts on how to structure your day in a previous post, which you can read here. 

Getting started in real estate, it’s important to hold yourself accountable to the schedule that you create for yourself. Having a schedule can help you navigate the challenge of flexibility that sometimes intimidates new brokers. 

Some people get into real estate because they want to free themselves from the 9-to-5 and have a more flexible schedule. With that said, it can sometimes be just as challenging as it is a benefit to have that much flexibility, especially early on.

A successful real estate broker’s daily schedule features time for generating and facilitating new relationships, and servicing existing business opportunities. Your schedule will also include time for training, time for marketing yourself and your business, and time for studying the market and staying up-to-date on what’s happening in your local area. And of course, you need some time off so that you can rest, rejuvenate, and be your best self for your clients every day. 

I think that one of the biggest mistakes that people make is that they don’t give themselves a structure to follow. Those who do set a structure and approach each day with intent are going to see a more consistent level of growth, and a more consistent level of success over time. 

4.) Not Focusing On the Number One Priority in Your Business — Lead Generation 

One essential skill to develop early on in your real estate career is the ability to prioritize. This means minimizing and avoiding distractions and sticking to your schedule with consistency, as we’ve discussed. Very importantly, establishing priorities also means having a clear lead generation strategy in place that’s not overwhelming to you. 

Inevitably you will get busy servicing your business and servicing your clients, and the first thing that some people typically compromise on is the lead generation — and that’s one of the biggest mistakes brokers make. 

When you become a real estate agent, you are a business owner. As a business owner, your number one job above all else is to find your business. This means that you need to be able to seed your funnel, nurture your sphere, and develop your own opportunities to generate leads. 

Your Managing Broker can help you at every step of the way — but you need to be self-motivated and consistent. Here at the Lincoln Park office, one of the first things we do with all new agents is sit down with them to strategize how they want to build their business. Our management team spends as much time as necessary with new brokers to help make sure their business plans and goals are ambitious yet achievable, while also scheduling regular check-ins throughout the year to help new agents closely monitor their progress.

As you create and execute a plan, make sure that you’re doing some things that you think you’re going to like, while also taking on some things that you think you might find challenging or are a little skeptical about. Be intentional, and don’t try to take on too much at once. Start with a smaller number of lead generation sources, and expand as you master them. 

For instance, we often recommend that new agents sit open houses; open houses are a great way to get exposure to the market and meet potential buyer and seller leads. On top of this, we might recommend adopting one or two other additional strategies at most; it’s really crucial to focus on going deep on those strategies and having a very clear plan and system that you can stick to, as opposed to spreading yourself out too thin.

5.) Not Being Financially Prepared to Get Into the Business

Starting your own business is a big step forward — and taking some time to prepare financially ahead of time is a crucial way to set yourself up for long-term success.

One of the biggest advantages of real estate is that you get to “be your own boss.” However, this also means accepting that you are responsible for your own income, and giving up that “regular” paycheck that you might be used to. While everyone’s journey is different, it could take potentially three to six months before you have your first closing.

For this reason, we recommend that agents come prepared by having some money in savings that can help get them through those early days. It’s also important to be prepared for those upfront costs like your board dues and your MLS dues, which can be costly as you’re first getting into the business. 

As part of your business plan, set up a clear budget for your business expenses. For example, how much are you willing to spend on your marketing every month? And don’t forget about taxes. At Baird  & Warner, our agents can easily get connected with our financial partner, who helps give agents the opportunity to set up a tax savings account from day one — so that they can set aside a certain percentage of their commission check to go right to their tax savings account and avoid that problem of paying Uncle Sam every year. 

Bottom line? It’s important for new brokers to start thinking more strategically — with the mindset that you are running a business, and that business has to come with a budget. Understanding what that means and how to allocate appropriately is incredibly important to having a long-running and successful business. 

Want to Learn More About Baird & Warner – Lincoln Park?

Interested in becoming part of a brokerage that just had a record-crushing year? Curious about how our office’s training, support, and services can help take your business to the next level? If you’re interested in talking about your career in real estate, we are always here to listen! Whether you are considering a career change or looking for a new partner in your existing business, I truly look forward to connecting. Get in touch today to get the conversation started.

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